CAC 40: PMI activity barometers and Fed Minutes on the menu

(News Bulletin 247) – The CAC 40 index, the benchmark barometer of the Paris Stock Exchange, continued to trace oscillations in thin tidy, close to the 6,600 points, the technical definition of which is current, as questions about the intentions of the major central banks on both sides of the Atlantic intensified. The Fed Minutes, released tonight (8:00 p.m. Paris time) will provide a candid opportunity to gauge the degree of firmness of the Federal Reserveand to better anticipate the future shape of the curve of Fed Funds: more flattened? but with a higher terminal rate?

This Wednesday will be THE session of the week that can generate volatility, with, in addition to the Minutes, a battery of PMI activity indicators, in 1st estimates for the current month. The German industrial component is expected at 44.9 points, well below 50 points, which by construction separates a contraction from an expansion of the sector in question. And this before the financial planet finds itself deprived of major benchmarks, with the closure of Wall Street tomorrow, and the entry into an extended weekend due to the Thanksgiving holidays. Wall Street will reopen Friday for a shortened session, in the absence of a very large fringe of investors.

On the stock side, TotalEnergies gained 4.4%, Vallourec +9.6% and Schlumberger rose 5.7%. You will find here the information explaining the progress of the (para) oil companies. Another well-oriented value: Interparfums, which advanced nearly 5% after once again raising its annual targets. Fears over the evolution of coronavirus cases in China have penalized luxury groups. L’Oréal lost 1%, Hermès lost 0.95% and LVMH limited its losses to 0.2%.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the green, like the Dow Jones (+1.18% to 34,098 points) or the Nasdaq Composite (+1 .36% at 11,174 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.36% to 4,003 points.

A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0340. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $80.90.

To be followed as a priority on the statistical agenda this Wednesday, the industrial and services PMIs, in first estimates for November. Synthetic data for the entire Euro Zone will be published at 10:00 am. To follow at 8:00 p.m. the Minutes of the Fed, traditional report of the last monetary policy meeting. To follow also at 2:30 p.m. the weekly registrations for unemployment benefits across the Atlantic.

Note, for holders of positions on the RD: The monthly liquidation will take place at the close of the session on Friday, November 25.

KEY GRAPHIC ELEMENTS

The rally that began on 10/04 resulted in a sharp return to a resistance zone at 6,550 points. The ability to overcome this in high volumes would pave the way for a continuation of this October rally. It is precisely this level that is being redefined, with congestion around 6,600 points. In the immediate term, the inability to create new high points suggests at least a breath. A short corrective phase towards the 20-day moving average (in dark blue) can also take shape at any time.

FORECAST

In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that a crossing of 6898.00 points would revive the tension in the purchase. While a break of 6390.00 points would relaunch the selling pressure.

Hourly data chart

Chart in daily data

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